S 121D(1) amended by No 70 of 2015, s 3 and Sch 3 item 5, by substituting
"
(subject to sections 121EA and 121EAA)
"
for
"
, provided that the requirement relating to the OBU in section 121EA is met
"
, applicable in relation to a thing an OBU does on or after 1 July 2015.

S 121D(1) amended by No 70 of 2015, s 3 and Sch 3 items 1 and 19
-
21, by inserting
"
(subject to subsection (4A))
"
in para (c), substituting para (d) and (f), and inserting para (ga), applicable in relation to years of income starting on or after 1 July 2015. Para (d) and (f) formerly read:

(d)
an eligible contract activity described in subsection (5); or

(f)
an advisory activity described in subsection (7); or

S 121D(1) amended by No 93 of 1999 and No 76 of 1996.

121D(2)
Borrowing or lending activity.

For the purposes of paragraph (1)(a), a
borrowing or lending activity
is:

(a)
borrowing money from an offshore person where, if that person is a related person or a person to whom paragraph
121E(b)
applies and is not an OBU, the money is not Australian currency; or

(b)
lending money, or making commitments to lend money, to an offshore person where, if that person is a person to whom paragraph
121E(b)
applies and is not an OBU, the money is not Australian currency; or

S 121D(2) amended by No 70 of 2015, s 3 and Sch 3 items 22 and 23, by inserting
"
, or making commitments to lend money,
"
in para (b) and inserting para (e), applicable in relation to years of income starting on or after 1 July 2015.

S 121D(2) amended by No 76 of 1996 and No 82 of 1994.

121D(3)
Guarantee-type activity.

For the purposes of paragraph (1)(b), a
guarantee-type activity
is:

(a)
providing a guarantee or letter of credit to an offshore person in relation to activities that are, or will be, conducted:

S 121D(3) amended by No 70 of 2015, s 3 and Sch 3 items 24 and 25, by substituting para (a), (b) and (d), applicable in relation to years of income starting on or after 1 July 2015. Para (a), (b) and (d) formerly read:

(a)
providing a guarantee or letter of credit to an offshore person in relation to activities that are, or will be, conducted wholly outside Australia; or

(b)
underwriting a risk for an offshore person in respect of property outside Australia or an event that can only happen outside Australia; or

(d)
issuing a performance bond to an offshore person in relation to activities that are, or will be, conducted wholly outside Australia;

S 121D(3) amended by No 82 of 1994.

121D(4)
Trading activity.

For the purposes of paragraph (1)(c), a
trading activity
is:

(a)
trading with an offshore person in:

(i)
securities issued by non-residents; or

(ii)
eligible contracts, under which any amounts payable are payable by non-residents; or

However, paragraph (1)(c) does not apply to a trading activity done by an OBU if:

(a)
the thing traded in affected the OBU
'
s total participation interest (within the meaning of the
Income Tax Assessment Act 1997
) in another entity; and

(b)
just before the trading activity:

(i)
the OBU
'
s total participation interest in the other entity was at least 10%; or

(ii)
any of the thing traded in was held by the OBU, and was not recorded in the OBU
'
s accounting records as held for trading in accordance with accounting standards (within the meaning of that Act).

For the purposes of paragraph (1)(e), an
investment activity
is making (but not managing), as broker or agent for, or trustee for the benefit of, an offshore person to whom paragraph
121E(a)
applies, an investment with an offshore person to whom that paragraph applies, where:

(a)
the currency in which the investment is made is not Australian currency; and

(b)
if the investment involves the purchase of any thing:

(i)
if the thing is a share in a company
-
the company is a non-resident company; or

(ii)
if the thing is a unit in a unit trust
-
the unit trust is a non-resident trust; or

(iii)
if the thing is land or a building
-
the land or building is not in Australia; or

For the purposes of paragraph (1)(e), an
investment activity
is also the managing by an OBU of a portfolio investment (see subsection
121DA(1)
) for the whole or part (the
investment management period
) of a year of income, where:

(a)
the portfolio investment is managed as broker, agent or custodian for, or trustee for the benefit of, a non-resident; and

S 121D(6A) amended by No 70 of 2015, s 3 and Sch 3 items 29 and 30, by substituting
"
subsection 121DA(5)).
"
for
"
subsection 121DA(5)); and
"
in para (e) and repealing para (f), applicable in relation to years of income starting on or after 1 July 2015. Para (f) formerly read:

(f)
if paragraph (e) does not apply
-
the average Australian asset percentage (see subsection
121DA(2)
) of the portfolio investment is not more than 10%.

For the purposes of paragraph (1)(e), an
investment activity
is also the managing by an OBU of a portfolio investment (see subsection
121DA(1)
) for the whole or part (the
investment management period
) of a year of income, where:

(a)
the portfolio investment is managed as broker, agent or custodian for, or trustee for the benefit of, an overseas charitable institution; and

(b)
the portfolio investment was made by the OBU or the overseas charitable institution.

S 121D(7) repealed by No 70 of 2015, s 3 and Sch 3 item 31, applicable in relation to years of income starting on or after 1 July 2015. S 121D(7) formerly read:

121D(7)
Advisory activity.

For the purposes of paragraph (1)(f), an
advisory activity
is giving investment or other financial advice to an offshore person where, if the advice is about the making of a particular investment, the investment is of a kind referred to in subsection (6). This does not exclude giving advice about a particular investment of a different kind if doing so is incidental to advising on an investment of a kind referred to in subsection (6), for example for the purpose of comparison or because the investments are commercially related.

For the purposes of paragraph (1)(g), a
hedging activity
is entering into a financial arrangement (within the meaning of the
Income Tax Assessment Act 1997
) with an offshore person for the sole purpose of eliminating or reducing the risk of adverse financial consequences that might result to the OBU from:

(a)
interest rate exposure of the OBU in respect of borrowing or lending activities (described in subsection (2)) of the OBU; or

(b)
currency exposure of the OBU in respect of borrowing or lending activities (described in subsection (2)) of the OBU.

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